A red-hot electric vehicle market has triggered a face-off between Big Oil and utilities.
Oil majors, who’ve sold fossil fuels to cars for a century, are now moving into an electricity sector that’s preparing for exponential growth. The problem is that utilities, the primary power suppliers for a century, have the same idea.
BP Plc predicts electric vehicle sales will surge by an eye-watering 8,800 percent between 2017 and 2040, making it an attractive business for oil companies as demand for gasoline and diesel are forecast to slow. Big Oil will have to battle the traditional utilities for charging at people’s homes, on the road and even offices of green-car owners.
“It’s the banging together of” industries “in a way that’s never happened before,” said Erik Fairbairn, the founder and CEO of Pod Point Ltd., one of the U.K.’s largest electric-vehicle charging companies. Power providers are, for the first time, meaningfully interacting with car companies and the oil industry “is realizing if they get this wrong then the requirement for them in the future is significantly diminished,” he said.
The logic for oil companies is clear. Gasoline and diesel sales have been a backbone of their business since the internal combustion engine went commercial at the turn of the last century. But with drivers now becoming more conscious about emissions and the environment, most analysts forecast growth in demand of these fuels to slow and eventually drop.
